Analysts: Vodafone gaining market share from rivals

Financial analysts believe Vodafone is now making strong progress in gaining market share over its rivals following a meeting last week with management from across the company's European operations.

As reported by Sharecast, Nomura analyst James Britton said that Vodafone is now focused on better managing the lifetime value of its customers across its subsidiaries in Germany, Italy, the Netherlands and the UK. According to Britton, Vodafone's management team indicated they were confident that smartphones were becoming of increased importance in measuring subscriber value, "aided by contract length extension and reducing churn."

The investment bank Evolution Securities added that, with Vodafone's European operations having suffered some difficulties recently, they are now in the midst of an impressive turnaround.

However, analysts from Evolution Securities presented a somewhat uneven recovery picture: "The UK, especially, is taking advantage of the merger travails of Everything Everywhere and winning back market share. The Italian management team were impressive, but face a far tougher market backdrop, while German management's appraisal of its market opportunity was the least convincing, despite healthy market trends."

Nevertheless, the summary view was, "relative to others, Vodafone should be relatively unaffected by supply chain problems (fewer handsets may even reduce churn), has few inflation worries and is a beneficiary of recent euro strength."

Another investment bank, Jefferies, was reported by Economic News as noting that Vodafone is now competing more effectively against Telefonica O2 due to the perception by customers of Vodafone having a more robust network. Vodafone stated that over 60 per cent of new customers named network quality as their reason for subscribing.

Interestingly, a Jefferies' observed in a research note: "There is no intention of pushing harder in consumer DSL in the foreseeable future, supporting our longstanding view that Vodafone is not a potential acquirer of TalkTalk."

For more:
- see this Sharecast article
- see this Economy News article

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